Global investor and author Ruchir Sharma’s third book Democracy on the Road: A 25-Year Journey Through India has generated much conversation in the run-up to the general elections. In an interview to BusinessLine , Sharma explains why he thinks coalition governments are more representative of Indian cultural ethos and the policy measures in the last five years that have disappointed international observers. Excerpts from the interview:

From the global business perspective, there was a lot of expectation and hope when the BJP won a majority in 2014. How have they fared?

I have a great quote in the book from a former US treasury secretary who told me that Modi is a performer not a reformer. What he meant was that he is not somebody who is thinking of the big picture or a vision. The thrust is more on dealing with projects, day-to-day work to be done; let’s get this train on the track, let’s get this programme going.

So, here’s a hard-working person who is tackling day-to-day affairs and running projects unlike someone, let’s say Ronald Reagan, who had a big picture and vision about free market and structural reforms. Now, this might work in a State like Gujarat where you have much better control over the State, and the bureaucracy is in much better shape and there’s a relatively smaller size and scope.

But when we’re talking about India as a whole, to carry on in the same manner is a very tiresome job. At best what a government can do in India is to present a big picture and let the States do their job. But to control everything from Delhi, centralise functioning is very difficult.

How do you view the narrative around Modi-versus-Mahamilavat, the implication being that a majority government headed by a strong leader is the best option against a corrupt coalition?

What I argue in the book is that the reality of India is one of many Indias. Worldwide, in countries which are heterogeneous in nature, coalitions tend to be a natural reality. Politics is the downstream of culture. In a way, many things in India that we tend to lament or criticise are often just a reflection of our underlying culture and social psychology.

I use the example of the EU and Canada as entities which have learnt to live with coalition governments as a way of life because of the way they have come together. This is just how we are and I, for one, wouldn’t worry about coalitions. On the contrary, I feel that too much centralisation in the way it happened in Indira Gandhi’s time is actually counterproductive because that is going against the very nature and ethos of our country.

In fact, what was celebrated arguably as the “Dream Budget” in 1997 came out of a coalition government. In India, the best chance of economic reforms is when we have our back to the wall.

There is no relationship between economic reforms and stable governments. Similarly, at the national level, there is no relationship between a stable, majority government and economic growth.

At the State level, however, there is a correlation between growth and dynamic chief ministers. Take the case of Narendra Modi in Gujarat and Nitish Kumar in Bihar and Shivraj Singh Chouhan in Madhya Pradesh for a while. But at the national level, what sort of leader we have and the bearing it has on the country is very limited.

After the BJP’s sweep in 2014, also in 2017 in Uttar Pradesh as well as the victories of Arind Kejriwal in Delhi and, to some extent, Nitish Kumar in Bihar, it is being argued that the hope factor with a strong leader over-rides the cleavages of caste, regionalism, etc...

That is only partly true. If you look at even Modi’s victory in 2014, he won only 31 per cent of the vote. In the UP elections, the BJP’s vote crossed 40 per cent. But the more relevant issue is that the people’s interface with the State in India is so corrosive that there’s a constant disappointment. This leads to what is called anti-incumbency, an exceptional phenomenon specific to India.

The term anti-incumbency was coined and popularised in India where the deep-rooted disappointment in day-to-day engagement with the State leads to people voting out the incumbents. So promise of development and the dynamism of one leader is only one of the factors in electoral successes in India. I keep quoting this politician called UT Khader who says that winning an election in India is like passing a series of exams in which you need to get a minimum of 35 per cent marks.

Even Nitish Kumar cannot get more than 20 per cent of vote share despite his tremendous record; the per capita income in Bihar has almost quadrupled under him. In the face of the Modi phenomenon, had the opposition been more united in UP, the result could have been very different.

There’s another critical factor that is being missed which is increased alienation of the South. Hindi and Hindutva do not resonate in the South. In Tamil Nadu, for instance, speaking Hindi there is like speaking English to a Frenchman in the countryside. Hinduism as a practice and belief is very different in the South. The religiosity that you experience in the North does not exist in the South except for pockets in Karnataka. In this election, we’re under-estimating the North-South divide. The narrative in Delhi is mostly shaped by the Hindi heartland.

How would you compare economic growth under the BJP with that of UPA’s ten years?

There are deep-rooted problems in India. The big global economic boom in the last decade was confused for something that was India-centric and we made mistakes. Today’s environment is much tougher and the private sector is facing a lot of challenges. My big complaint is that some structural issues have not been addressed at all.

I don’t advise governments because it’s actually quite pointless but when they (the BJP) initially asked me, I told them that privatising public sector banks should be a priority. I am not saying you don’t need public sector banks because you do have social priorities and I am not saying that private sector is free of scandals. But there has to be a balance. In India, two-thirds of the assets are with public sector. The average across developing countries and emerging markers is one-third.

And not everyone believes the growth figures that are being put out…

When the controversy about changing methodology for growth first surfaced in early 2015, I said that it was wrong. I felt at the time that it was just more incompetence not mal-intent. But today, I’m not sure what is going on. There’s a lot of talk about data being coloured. All I can say is that the credibility of data has become progressively worse.

The BJP has been very chuffed with the Budget which has a lot of sops for farmers, middle class, etc.

They’re trying to do what they have to do. I don’t remember any election when last-minute sops have materially helped the ruling party.